1HFY19 RESULTS PRESENTATION - 27 FEBRUARY 2019 - Azure Healthcare
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1HFY19 RESULTS
PRESENTATION
27 FEBRUARY 2019
1
1HFY19 SUMMARY
• Revenue of $14.97 million exceeds November guidance
Financial • Reported loss of $0.47 million, normalised profit of $0.26
million excluding one-off items
Performance • Cash balance as at 31 December of $2.01 million
• Debt reduced by 37% to $0.41 million
• Innovative new products released, including Pulse Workflow
Operational and sophisticated integrations
Highlights • Largest order book in recent history
• Important contract wins in multiple regions
• Market demand remains strong as reflected by the order
book
Outlook • US tariffs on Chinese imports remain a risk
• Second half revenue expected to be at or slightly above first
half and therefore exceed FY18
1HFY19 FINANCIAL SNAPSHOT
Revenue Margin NPAT
$14.97m $6.66m ($0.47m)
Normalised $6.84m Normalised $0.26m
$0.73m or Consistent with Normalised
5.1% on pcp ($0.18m) or
pcp
(41%) on pcp
Cashflow from Net Cash
Operations $1.60m
$0.68m
($0.05m) from
$0.22m or
30 June
49% on pcp
* pcp: prior comparative period
REVENUE
SALES REVENUE (A$000S)
Continued growth in sales revenue over pcp
and November ‘18 guidance:
• $1.44m (10.7%) above November ‘18 14,972
guidance 14,242
• $0.73m (5.1%) increase over 1HFY18 13,530
13,054
• 7% CAGR from 1HFY17
• Aust/NZ, Asia and Europe all reported
revenue increases
• recurring software revenue growth consistent
with overall growth in sales revenue of 11%
1H17 1H18 1H19 (g) 1H19
Revenue increased beyond guidance despite difficult trading
conditions.
GROSS PROFIT & MARGIN
GROSS PROFIT MARGIN
Gross margin down to 44.5% compared (A$000S)
to 48% pcp:
• negatively impacted by rising costs of raw 6,836
6,662
6,843
materials resulting from US tariff imposts 5,990 48.0%
44.5%
45.7%
on Chinese goods 45.9%
• total CoGS up by 12.6% as result of
increased sales and raw material cost
increases
• CoGS includes one-off write-down of
$0.18m in project costs
• normalising for write down increases gross
1H17 1H18 1H19 1H19
margin to 45.7% (Norm)
Margin impacted by raw materials issues out of China.
OVERHEAD EXPENSES
OVERHEAD EXPENSES
Overhead increased by $0.71m to $7.11m in (A$000S)
1H19:
• increase driven by large one off costs of 8,256
$0.54m related to management restructuring
544
• normalised overhead increased 2.6% over 6,567
6,399
1H18 to $6.57m
• the business remains committed to R&D,
investing a total of $1.68m in 1H19,
consistent with $1.72m in 1H18
• following the policy revision announced in
2H18, $0.70m of development costs were 1H17 1H18 1H19
capitalised in 1H19 Overhead expenses Restructuring costs
Normalised overhead costs broadly consistent with 1HFY18.CASH & DEBT
Cashflow from operations continue Net cash was largely unchanged over
to improve: the period with a minor decrease of
$0.05m from $1.65m to $1.60m:
• cashflow from operations of $0.68
million increased from $0.45 million in • debt was reduced by $0.24m
the pcp
• cash was reduced by $0.30m to
$2.01m
CASHFLOW FROM
OPERATIONS (A$000S) CASH & DEBT (A$000S)
2,307
454 676 2,011
655
-2,693
413
1H17 1H18 1H19 June18 Dec18
Debt Cash
Net cashflow will be required to support fulfilment of the
growing order book.PRODUCT UPDATE
Pulse Mobile Web Services Enhanced Reporting and
Analytics
• One of our most popular • Open API for alarms
software products • RTLS complete • True enterprise reporting
• Released in FY18 • Additional integrations • Added functionality, expanded
• Native smart phone app are a longer term goal capabilities
• Alarm management with
further features under
development
Azure has a strong commitment to ongoing R&D for both
hardware and software, with a disciplined quarterly release
program.PROGRESS ON STRATEGY
Strategic Objective Status
Focus on high quality new products that differentiate ‣ Released new products including
Azure from its competitors Pulse Workflow
Improve manufacturing efficiencies to drive further ‣ Material requirements planning
cost reductions (MRP) system deployed
Maximise sales opportunities
‣ Added new sales partners in
multiple regions
Increase revenue from subscription based software ‣ Growing order book for software
licence and maintenance agreements products
Build further partnerships with market leading
‣ Established partnerships with
market leading medical device
healthcare technology companies
vendors
Management continues to focus on improving business
efficiency and building revenue growthOUTLOOK
External Internal
• Increasing shift towards open software • Order book remains significantly
packages to accompany hardware higher than forecast despite supply
constraint issues
• Procurement challenges will continue
to be dominated by trade issues • Strong demand across all geographic
between the US and China (which will segments
continue even after the tariff outcome
• Greater levels of investment in
is known)
inventory required over next half and
• A ‘No Deal’ Brexit will bring challenges beyond to support growth
in the UK and from the rest of the
• Second half revenue expected to be at
world into the UK (decision due 29
or slightly above first half and
March)
therefore exceed FY18
While the next half may be shaped by major international
policy events, we still expect 2H revenue to be at or slightly
above 1H.DISCLAIMER This Publication does not constitute an offer, invitation or recommendation for the sale or purchase of any securities in any jurisdiction. References to, and the explanation of, legislation and regulatory issues in this Publication are indicative only and should not be relied on. They do not purport to summarise all relevant legislation and regulatory issues or to be a full explanation of any particular matter. Past Performance Past performance information given in this Publication is given for illustrative purposes and should not be relied upon as an indication of future performance. Forward Looking Statements The information contained herein involves elements of subjective judgment and analysis and may be identified by words such as 'may', 'could', 'believes', 'expects', 'intends' or other words that involve risk and uncertainty (collectively, forward looking statements). Any forward looking statements expressed in this Publication are subject to change without notice. They do not constitute, and should not be regarded as, a representation that the relevant results will actually be achieved or that the underlying assumptions upon which forward looking statements may be based are valid or reasonable. Actual results may vary from the forward looking statements and such variations may be material. Other Information All financial amounts contained in this Publication are expressed in Australian currency unless otherwise stated. Any discrepancies between totals and sums and components in tables contained in this Publication are due to rounding. Disclaimer Other than to the extent required by law, neither Azure nor any of their respective affiliates, associates, shareholders, directors, officers, employees, agents, representatives and advisers (the Azure Parties) make any representation or warranty (express or implied) as to, and assume responsibility or liability for, the authenticity, origin, validity, accuracy or completeness of, or any errors in or omissions from, any information, statement or opinion contained in this Publication or in any accompanying, previous or subsequent material or presentation in connection with the subject matter of this Publication. Without limiting the foregoing, none of the Azure Parties: • makes or purports to make any statement or representation (including, but not limited to, any representation with respect to any forward looking statement) contained in this Publication; • is responsible for the contents of this Publication; • has verified the accuracy or completeness of this Publication; or • is liable in any way for any misstatement in, or errors in or omission from, this Publication or in any accompanying, previous or subsequent material or presentation in connection with the subject matter of this Publication, except and then only to the extent required by law. United States In particular, this Publication is not an offer of securities for sale in the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the United States Securities Act of 1933 (the Securities Act)). Azure, its affiliates and related bodies corporate are not and will be registering any securities under the Securities Act or the securities laws of any state of the United States or any other jurisdiction other than the Commonwealth of Australia. This document has been prepared for publication in Australia and may not be released or distributed in the United States or to U.S. persons. Failure to comply with this directive may result in a violation of the Securities Act and/or another applicable law of the United States or another jurisdiction.
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